Ottawa August 21st, 2003
Eugen Szekely
13A Howick Place
Ottawa, Ontario
K1S 3S4, Canada
Telephone: [1] (613) 233 1743
Telecopier: [1] (613) 233 1743
Email: eszekely@rogers.com
Samuel A. DiPiazza Jr
Chairman's
Office - USA Firm
PricewaterhouseCoopers LLP
1177
Avenue of the Americas
New York, New York 10036 USA
Telephone: [1] (646) 471 4000
Telecopier: [1] (646) 471 3188
BY FAX
Subject: PricewaterhouseCoopers Romania’s illegal actions
Dear Mr. DiPiazza Jr.,
On two previous occasions I have sent you documents regarding the activities of PricewaterhouseCoopers Romania during the liquidation of COMTIM having as object the house that was built by my grandfather Eugen Klein. This house was nationalized by the Communist Romanian State in 1950 and is now under the incidence of Law 10/2001 which deals with the restitution of such property. My numerous contacts with various partners in the PricewaterhouseCoopers offices in the US, UK and Romania are documented in the annex and attest to my efforts to allow PricewaterhouseCoopers to abide by its message of corporate integrity and to solve internally this blatant case of disregard for the Romanian law.
Unfortunately, the lack of interest and the serious flaws revealed in the two “investigations” lead by Mr. Vernon, following my accusations relative to the actions of PwC Romania, leave me no recourse but to request a full penal investigation in this matter from the Romanian authorities.
Without expanding on my previous analysis of Mr. Vernon’s “investigations” and the actions of the PwC Romanian office, I intend in this communication to provide you with the proof that Mr. Emilian Radu has knowingly lied in August 2001 document, when he refused the restitution of the house against the provisions of the Law 10/2001, which deals with the restitution of the admittedly illegally confiscated property by the Romanian State (the original Romanian document and its English translation can be accessed on the Web at the address provided in the annex). As such, in the name of PwC Romania, Mr. Emilian Radu, Head of Corporate Finance & Recovery Services, has sold the “litigious rights” to the house for 1/10th of its real value to the company Agrotorvis as the documents attest. This action refutes the favorite arguments of Mr. Vernon’s two conclusions that PricewaterhouseCoopers Romania has at all times acted professionally with the interest of the creditors at heart.
This deep-discounted sale cannot be in the interest of the creditors even under normal conditions, but it is always an indication of the self-serving interest of the person that authorizes it. Furthermore, using an easy-to-follow logic, even by somebody not aware that Romania is one of the most corrupt countries in the world (although PwC compiles these statistics), it has to be stressed that PricewaterhouseCoopers Romania, or Mr. Emilian Radu, the Partner supervising this liquidation, had made no attempt to solve the restitution issue by claiming a compensation for the “improvements” that COMTIM put into the house before they entered in this Contract of Cession of Credit. As such, the argument that PricewaterhouseCoopers Romania was protecting the interests of the creditors (although in this case it broke the Romanian law doing so) has no value as the will of Mr. Emilian Radu, and that of PricewaterhouseCoopers implicitly, was to sell the house at a deep discount to Agrotorvis and not to obtain the same amount of money from me for the restitution of the house! It is the duty of the Romanian justice system and its prosecutors to find out what was the real “incentive” behind this fraud.
In addition, the illegal refusal of the restitution is further aggravated by the fact that the law which covers that status of the nationalized house, Law 10/2001 and its application normative, explicitly forbid the inclusion of such property in the liquidation process (HG 498 art 1 pct. f. and art 21.1- on the Web in Romanian at http://www.oocities.org/pwcromania/HG498.html) . In other words, not only Mr. Emilian Radu, refused the restitution of the house claiming the need to use it in the liquidation procedure, while at the same time being in the middle of a transaction to sell the house for 1/10th of its value, but this house cannot be legally included in the liquidation procedure!
Concluding, the inclusion of an illegally obtained asset in the liquidation procedure, the refusal of its restitution using false arguments in order to profit from such an act amount, under the Romanian as well U.S. Law, to a FRAUD! As such, I am going to request from the Romanian legal authorities an investigation in these actions providing the corroborating documents in my possession.
On July 3rd, 2003, I sent a letter including all the documents signed by PwC revealing the illegality of their actions to Mrs. Speranta Munteanu, the Director of Recovery Services for PwC Romania, asking for an immediate restitution of the house and offering not to press any charges following PwC’s fraudulent act. I received no response.
I sent a letter to the Syndic Judge on August 13th, 2003 requesting the immediate restitution of the house as mandated by the law and the annulment of the illegal contract initiated by Mr. Emilian Radu on December 13 th, 2003. If my request is ignored or denied, after the 10 days from the submission date, I will submit a complete file of the actions centering the house to the Romanian National Anti-Corruption Committee. Further more, in order to insure the application of the Romanian laws and in order to impede the influence that can be exerted by the interested party in burying this topic, I will submit the complete file to the Romanian Prime Minister, Romanian Minister of Justice, Romanian Chief Prosecutor as well as the Romanian National Newspapers.
As I have stated at the beginning of this communication, I have lost any hope that PricewaterhouseCoopers is willing or able to deal with the illegal action of the Romanian office as such I am making this letter public on the web at http://www.oocities.org/pwcromania/letter.html and I will forward this case to the North American newspapers as a text book example of PwC’s inability to self-investigate its failures.
Best regards,
Eugen Szekely
P.S. I will send this document to the following PricewaterhouseCoopers Partners that took part in the previous two investigations in the Romanian office’s activities: Mr. Kieran Poynter, Mr. Larry Keeshan, Mrs. Barbara Kipp and Mr. Anthony Vernon.
Annex:
Annex 1.
Explanatory note – the underlined dates refer to contacts with the PricewaterhouseCoopers offices in the UK and the US while the others refer to the PricewaterhouseCoopers Romanian office
· June 2001 – I request from COMTIM the restitution of the house as mandated by the Law 10/2001
· June 2001 – letters describing the situation in Romania were sent to the Chairman’s Offices in the US, UK and Romania. No acknowledgment or reply was ever received.
· August 2001 – With complete disregard for the Law 10/2001, using ridiculous arguments, PricewaterhouseCoopers Romania, as the named liquidator for COMTIM, through the authority of Emilian Radu (PricewaterhouseCoopers Partner, Head of Corporate Finance & Recovery Services – biography can be seen here http://www.pwcglobal.com/ro/eng/about/press-rm/partners/), refuses the restitution of the house although this is not allowed by the above mentioned law. The main argument used is that the house needs to be used in the liquidation process.
Original Romanian document can be seen here http://www.oocities.org/pwcromania/raspPWC1.jpg and http://www.oocities.org/pwcromania/raspPWC2.jpg while its English translation was provided in my previous correspondence and can be found on the main Web page.
· September 2001 – I reply to COMTIM, offering to keep the current activity in the house and pointing out that their refusal is illegal. No reply was ever received.
· At the same time, PwC Romania is negotiating the sale of the „litigious rights” to the house with S.C. Agrotorvis S.R.L. publishing in November 16th, 2003 a public advert in the local newspaper Renasterea Banateana (the advert can be seen here in the Romanian original - http://www.oocities.org/nationalizarea/renasterea.pdf). The sale of the “litigious rights” is listed at the F. paragraph.
· 26 noiembrie 2001, following the publishing of the advert we notified all the parties (Syndic Judge, COMTIM, PricewaterhouseCoopers and Agrotorvis) about the illegality of this transaction. The letter, in Romanian, to the Syndic Judge can be seen here http://www.oocities.org/pwcromania/sindic.jpg. Following this notification, COMTIM’s lawyer, Mr. Scrieciu declared in Court that this transaction will not take place, however no official reply was received from COMTIM or PricewaterhouseCoopers.
· December 2nd, 2001 – urgent fax to the office of Mr. James J. Schiro, the CEO of PricewaterhouseCoopers about PwC’s Romania illegal attempt to sell the judicial right to the house. No acknowledgment or reply was ever received.
· 13 decembrie 2001, as the Contract of Cession of Credit proves dupa cum dovedeste Contractul de Cesiune de Creanta the same PricewaterhouseCoopers Partner, Mr. Emilian Radu, sells the litigious rights to the house for 80,000US$ (nota bene – the minimum estimated value of the house is 500,000US$) to the same company S.C. Agrotorvis S.R.L. (the English translation of the original Romanian document can be seen here http://www.oocities.org/pwcromania/cession.html and the Romanian original here http://www.oocities.org/pwcromania/cr1.jpg http://www.oocities.org/pwcromania/cr2.jpg http://www.oocities.org/pwcromania/cr3.jpg http://www.oocities.org/pwcromania/cr4.jpg) The entire amount of this contract was to be paid in the COMTIM’s liquidation account within 5 days from the date of the contract, December 13th, 2001. Through this same Contract, Agrotorvis will pay the litigation and COMTIM’s lawyer’s fees in an effort to obtain the house.
· December 16th, 2001 – a second fax was sent to Mr. James J. Schiro re-iterating the same concerns as outlined in the first communication and requesting a confirmation that the illegal sale of the judicial rights was aborted. No acknowledgment or reply was ever received.
· After December 2001 – as PricewaterhouseCoopers could not pay the maintenance of the house from the depleted funds of COMTIM, the same PricewaterhouseCoopers Partner Emilian Radu, sublets the house through an un-dated Protocol (the original Romanian document can be seen here http://www.oocities.org/pwcromania/protocol.jpg and the English translation here http://www.oocities.org/pwcromania/protocole.html ) to S.C. Agrotorvis S.R.L. and to S.C. Comtim Group S.R.L. specifying that Agrotorvis is to use the second floor and the annex while COMTIM (in liquidation) and SC Comtim Group SRL will use the rest of the house. The utility and maintenance fees will be paid in exclusivity by S.C. Comtim Group S.R.L.
Note – This sublet contract is concluded until 2004 showing the confidence of PricewaterhouseCoopers in maintaining the control over the house until that date.
· September 6th, 2002 – I contacted Mr. Ricciardi, US based attorney for PwC, and presented the current situation in Romania. He forwarded my message to Mr. Vernon, UK based attorney for PwC, who was supposed to deal with complains that were related to PwC Romania. My accusations and corroborating documents were posted on the Web site http://www.oocities.org/nationalizare created for this purpose. Over the next few months I have called and emailed Mr. Vernon asking for the conclusion of his investigation and I was given vague excuses and new dates that were never kept.
· December 18th, 2002 – the entire content of this site, at that time, (here in Word format http://www.oocities.org/nationalizarea/press.doc) exposing in detail the illegality of PwC Romania together with copies of original documents supporting my accusations was sent trough courier to: Mr. Samuel A. DiPiazza Jr. PwC’s Global CEO, Mr. Kieran Poynter, PwC’s UK Senior Partner, Ms. Barbara Kipp, PwC’s Global Leader, Ethics and Business Conduct. An acknowledgment message was received from Ms. Kipp.
· December 30th, 2002 – shortly after I sent the documents to the Senior PwC Partner in UK and PwC’s CEO in the US, I receive the conclusion of Mr. Vernon’s “professional Investigation” (http://www.oocities.org/pwcromania/vernon.html). As the Web statistics of the page containing my accusations and corroborating documents prove, Mr. Vernon has not once accessed it being content with providing me with the English translation of PwC Romania official position.
· January 19th, 2003 – I send my analysis (http://www.oocities.org/pwcromania/vernon.html#jan19_e)of Mr. Vernon’s reply to Mr. Vernon and I copy the following PricewaterhouseCoopers Partners: Mr. Samuel A. DiPiazza Jr, Mr. Kieran Poynter, Ms. Barbara Kipp and Mr. Ricciardi.
· January 31st, 2003 - I receive a reply from Mr. Vernon (http://www.oocities.org/pwcromania/vernon.html#jan31_v)following my analysis of his investigation. Although “more than satisfied with the work of the reviewers and the conclusions reached in the initial review”, Mr. Vernon has decided to further ask for a review of my accusations made by someone independent of PwC Romania. The review will take place on the week of February 3rd and I was promised a conclusion by the end of the week commencing on February 10th, 2002.
· February 14th, 2003 – 20 months after we have made the restitution request as mandated by the Law 10/2001. Mrs. Speranta Munteanu, Director of the Liquidation Department in an “offer for a quick resolution to the conflict” refers fro the first time in the procedure based on the Law 10/2001 the need to provide proof that Eugen Klein refers to the same person as Ionas Klein – an exception raised by COMTIM during the first litigation in January 24th, 2001 and eventually dropped in September 2000 by the same lawyer, Mr. Scrieciu (the corroborating documents and the analysis of this situation can be seen here http://www.oocities.org/pwcromania/redherring.html).
In the same “offer”, PricewaterhouseCoopers Romania, through Mrs. Speranta Munteanu claims that the house was modified into an office building by COMTIM in 1979, although the same house was an office building since 1967 and based on the previous argument, against the letter of the Law 10/2001 requests compensation for those “modifications”.
· February 25th, 2003 – I receive Mr. Vernon’s conclusion to the second investigation (http://www.oocities.org/pwcromania/vernon.html#feb25_v)done by an “independent” reviewer. The conclusion, voided of any arguments or references to my accusations, generically states that PwC Romania acted properly in this matter. It further refers to the identified issues by the reviewer as to the proof of my relationship to Eugen Klein and I quote “has been advised by PwC Romania that it is up to you to prove to the satisfaction of the relevant Court, not merely PwC Romania, that you are the lawful heir of Eugen Klein” (nota bene – PwC Romania found this to be a problem only on February 14th, 2003 although this issue was addressed since January 2000!)
· February 26th, 2003 – I sent my detailed review of Mr. Vernon’s second investigation (http://www.oocities.org/pwcromania/vernon.html#feb26_e)to Ms. Kipp, PwC’s Global Ethics Leader pointing out that this second review, like the first, ignores my supporting proof to the accusations against PwC Romania and uses just generic statements to proclaim the propriety of PwC Romania’s actions in this case.
· March 4th, 2003 – Ms. Kipp endorses Mr. Vernon’s conclusion (http://www.oocities.org/pwcromania/vernon.html#mar4_k), declaring the matter close. In reply to my accusations of impropriety of the second investigation, Ms. Kipp declares: “It is not our policy to share the details of any investigations with complainants”. This matter is considered closed for PwC!
Annex 2.
Contract of Cession of Credit
Preamble
The current Contract of cession of credit takes place within the CEDENT’s liquidation procedure file nr. 30/S/1999 with the Timis Court and following the dispositions of the Law 65/1995 republished.
Complying with the Conclusions nr. 1921/CC and 2355/CC announced by the Syndic Judge in the public sessions of November 15th, 2001 and December 13th, 2001 in the liquidation dossier nr. 30/S/1999 with the Timis Court – Commercial Section and in compliance with the Bilateral Promise of Sale-Purchase dated of September 24th, 2001, the Additional Act nr. 2 dated October 11th, 2001 and the Additional Act nr. 3 dated October 18th, 2001
and
observing that the headquarter of Comtim SA (in liquidation) located in Timisoara, 7 aprilie 1929 no. 1 is the object of two restitution procedures: one restitution procedure (now suspended) based on the Common Civil Law (procedure noted in the title deed CF 425 Timisoara section B 7) and a restitution notification based on the Law 10/2001
the contractual parties
1) S.C. Comtim S.A. (in liquidation), of Timisoara, street 7 aprilie 1929 nr. 1 registered with ORC Timisoara with the nr. J35/1192/1991, fiscal code R 1826915, company now in judicial liquidation based on the Law 64/1995 republished, represented by S.C. PRICEWATERHOUSECOOPERS MANAGEMENT CONSULTANTS S.R.L. of Bucharest, street Costache Negri nr. 1 – 5, sector 5 registered with O.R.C. Bucharest with the nr. J40/25750/1994, fiscal code nr. R6812848, as the LIQUIDATOR named in the dossier nr. 30/S/1999 with the Timis Court, through Mr. Emilian Radu – administrator, in the quality of CEDENT
and
2) S.C. Agrotorvis S.R.L. of Timisoara, str. Ciprian Porumbescu nr. 94, copr. B, registered with ORC Timis with the nr. J35/I122/2001, represented by Mr. Renato Andretta – administrator, in quality of CESSIONARY
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Emilian Radu (initials) Renatto Andretta (initials)
of mutual accord agree to enter, under private signature, in the present contract with the following clauses:
ART. 1 DEFINITIONS AND INTERPRETATIONS
1.1. “LITIGIOUS RIGHTS” means the rights of the CEDENT to the headquarter of Comtim of Timisoara, 7 aprilie 1929 street nr. 1 under a litigious action as it is described in the preamble of this Contract, as well as the obligations that can be imposed on the CEDENT following the resolution of the litigious proceedings
1.2. “THE PARTIES” means the CEDENT and the CESSIONARY
1.3. “THE LIQUIDATION’S BANK ACCOUNT” means the S.C. Comtim S.A. (in liquidation) liquidation bank account nr. 2641000067594 at the ABN Amro Bank Timisoara.
1.4. “CONTRACT” means the current Contract of cession of credit between the CEDENT and the CESSIONARY.
ART. 2 THE OBJECT OF THE CONTRACT
2.2 The CEDENT transmits and the CESSIONARY receives the credit comprised of the LITIGIOUS RIGHTS to the headquarter of Comtim S.A. (in liquidation) located in Timisoara, street 7 aprilie 1929, nr. 1, which could be obtained through the resolution of the litigious proceedings mentioned in the Preamble.
ART. 3 THE PRICE OF THE CESSION
3.1. The negotiated PRICE, agreed by both parties, is the equivalent in lei of 80,000US$ (eighty thousand US dollars) calculated based on the conversion rate leu/US$ of B.N.R. from the day of the payment; TVA is not applicable.
3.2. The amount of 80,000US$ will be paid in the liquidation account of S.C. Comtim S.A. (in liquidation) nr. 264100067594 opened at the Timisoara branch of ABN Amro Bank guaranteed by the Letter of guaranteed payment nr. 062/18.10.2001 issued by the Italo-Romena Bank – last paragraph – not later than five working days from the date of signature of the present Contract.
ART. 4 THE OBLIGATION OF THE CEDENT
4.1. The CEDENT makes the commitment that in case of a favourable solution to the CEDENT of the restitution procedures and obtaining the title deed to the headquarter of Comtim S.A. street 7 aprilie 1929 nr. 1 Timisoara, to transmit the CESSIONARY the corresponding title deed.
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Emilian Radu (initials) Renatto Andretta (initials)
Because the CEDENT uses the building for the liquidation procedure, the transfer of the title deed will take place after the conclusion of the liquidation procedure, before the removal of the CEDENT from the Commerce Registry.
4.2. In order to achieve this goal, the CEDENT will continue the judicial procedure to obtain the title deed to this building on at the expense of the CESSIONARY.
ART. 5 THE OBLIGATION OF THE CESSIONARY
5.1. The CESSIONARY makes the commitment to take hold of the property in the eventuality of a favourable solution to the CEDENT during the restitution proceedings and obtaining the tile deed to the headquarter of Comtim S.A. Timisoara, 7 aprilie 1929 nr. 1.
5.2. The CESSIONARY makes the commitment to pay all the expenses part of the continuation of procedures to obtain the LITIGIOUS RIGHTS, including the lawyers’ fees, those of technical expertise and evaluations and judicial stamp fees, within a maximum of 30 days from the date when the payment is requested by the CEDENT.
The lawyers’ fees are those negotiated between the CEDENT and the Lawyer’s Practice in the Contract for judicial assistance, stamp fees are those provided by the law and the fee for expertise are those mandated by the Courts.
ART. 6 EXCLUSION OF CALUSES, GUARANTEES AND RESPONSABILITIES
The CESSIONARY declares that:
- it understands the status of the litigious rights that are the object of this contract
- it understands the aleatory character of this contract
ART. 7 THE LIMITATION OF LIQUIDATOR’S RESPONSIBILITY
The LIQUIDATOR does not assume any responsibility related to this or created by this Contract or in any other document that refers to this Contract; the LIQUIDATOR takes part in this Contract, at all times as the representative of the CEDENT and will not have any responsibility to the CESSIONARY when being in this position.
ART. 8 THE ANNULLMENT OF THIS CONTRACT
In the event that the CESSIONARY does not comply with its payment duties of expenses as outlined in art. 5.2. the Contract will be annulled as a whole, without notification, without a delay option or the intervention of the Court, the amount of 80,000US$ will be kept for damages of interest.
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Emilian Radu (initials) Renatto Andretta (initials)
ART. 9 ACT OF GOD
An act of God exonerates of any responsibility the party that invokes it under the provision of a written notification to the other party within 5 days from the day of the event, confirmed within 15 days by a proving certificate issued by the Chamber of Commerce and Industry which has jurisdiction.
ART. 10 FINAL PROVISIONS
10.1 Any litigious issues relative to the present Contract will be solved amiably, on the contrary the litigious issue will be brought for a solution in front of the respective Court.
10.2 The Parties agree that an initial copy of this current Contract signed by fax produces the same effects as the copies signed in original, following that on December 17th, 2001 the originals will be presented.
Concluded today, December 13th, 2001 in three original copies, one for every contracting party and one to be entered in the dossier nr. 30/S/1999 at the Timis Court.
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S.C. COMTIM S.A. (IN LIQUIDATION)
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S.C. Agrotorvis S.R.L.
|
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by the liquidator |
by Renato Andretta (signature) |
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PricewaterhouseCoopers Management Consultants SRL |
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Emilian Radu (signature) |
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The original Romania document can be seen on the Web here:
Page 1 http://www.oocities.org/pwcromania/cr1.jpg
Page 2 http://www.oocities.org/pwcromania/cr2.jpg
Page 3 http://www.oocities.org/pwcromania/cr3.jpg
Page 4 http://www.oocities.org/pwcromania/cr4.jpg
